The study was carried out by the organisation LocalCircles.
The survey highlighted challenges such as claim denials, partial payments and prolonged settlement durations.
Anyone who has had health insurance and then had to undergo a medical emergency can vouch for the fact that it is extremely difficult to claim the insurance money from the company. While selling their insurance policies, the company generally assures financial aid during medical emergencies, but a lot of cases are reported where the insured are unable to claim the insurance money. Following the Covid-19 pandemic period, there has been a sharp rise in the demand for health insurance across the country. There is also a corresponding increase in cases where insurance claims are rejected or payments refused by the companies. According to a survey, over the past three years, approximately 43 percent of health insurance policyholders encountered obstacles in having their claims settled. The survey, which engaged over 39,000 individuals across 302 districts nationwide, highlighted challenges such as claim denials, partial payments, and prolonged settlement durations.
A significant majority of the participants, accounting for 93 percent of those surveyed by the organisation LocalCircles, expressed a need for regulatory reforms to address this issue. Among the proposed changes is the requirement for insurance companies to regularly disclose comprehensive data on claims and policy cancellations on their websites, with a monthly frequency.
The situation has not changed even with the intervention of the Insurance Regulatory and Development Authority of India (IRDAI). LocalCircles said, “Despite some interventions by IRDAI, consumers have to struggle with insurance companies to get their health claims. They also mentioned problems like denial of health insurance claims by the insurance company and cancellation of policies. Many times insurance companies approve only a partial amount instead of the entire amount made in the claim.”
Some health insurance policyholders have highlighted a key concern: insurance companies often cancel policies during the claims process, citing reasons such as pre-existing conditions. This issue is significant, with approximately one-third or 1.6 lakh cases out of the total 5.5 lakh pending consumer complaints received by the Department of Consumer Affairs pertaining to the insurance sector. The Consumer Affairs Department has also shared concern on the fact that agents hardly take any interest to guide or help policyholders after selling policies as their commissions are front-loaded.
